Short sellers betting against FTSE 100 companies have been left around £420mln out of pocket in August, according to new data.
Analysis by Ortex Analytics showed that around three-quarters of total short losses in the month came from bets made against just five blue-chip firms; online grocer Ocado Group PLC (LON:OCDO), Holiday Inn owner Intercontinental Hotels Group PLC (LON:IHG), British Airways owner International Consolidated Airlines Group SA (LON:IAG), miner BHP Group PLC (LON:BHP) and educational publishing firm Pearson PLC (LON:PSON).
Ocado cost the FTSE 100’s short sellers around £79.5mln in August, while IHG caused £70.6mln of losses, IAG £67.7mln, BHP £67.2mln and Pearson £24.8mln.
However, short sellers were able to turn a profit on one of these bets, with Shell returning a £15.1mln profit for short positions in August. Meanwhile, the most profitable stock to short in the month was investment group Hargreaves Lansdown PLC (LON:HL.), which returned a short position profit of £25.8mln.
However, profitable shorts were the minority during the month, with only 32 of the 100 blue-chip firms delivering a profit for the short sellers.
“The FTSE 100 is often seen as a bellwether for investor confidence and understanding the interplay between share price performance and short profit gives a perspective on who is winning in the battle between the bulls and the bears”, said Ortex co-founder Peter Hillerberg.
“For August, we’ve seen a number of big trades turn sour for short sellers driving heavy cumulative losses, but as we’ve seen so many times throughout the pandemic, the pendulum can quickly swing the other way and it wouldn’t be a surprise to see a reversal of fortunes next month”, he added.